Shareholders Will Be Pleased With The Quality of Yee Hop Holdings' (HKG:1662) Earnings

Yee Hop Holdings Limited (HKG:1662) recently posted some strong earnings, and the market responded positively. We have done some analysis, and we found several positive factors beyond the profit numbers.

See our latest analysis for Yee Hop Holdings

The Impact Of Unusual Items On Profit

To properly understand Yee Hop Holdings' profit results, we need to consider the HK$5.6m expense attributed to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Yee Hop Holdings to produce a higher profit next year, all else being equal.

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Yee Hop Holdings.

Our Take On Yee Hop Holdings' Profit Performance

Unusual items (expenses) detracted from Yee Hop Holdings' earnings over the last year, but we might see an improvement next year. Because of this, we think Yee Hop Holdings' earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share have grown at an extremely impressive rate over the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into Yee Hop Holdings, you'd also look into what risks it is currently facing. For example - Yee Hop Holdings has 1 warning sign we think you should be aware of.

This note has only looked at a single factor that sheds light on the nature of Yee Hop Holdings' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.